Dollar index and Rate Hike
By reading thee Dollar Index (DXY) performance , it can provide us some insight into the potential for a Federal Reserve (Fed) rate hike.
The Dollar Index measures the value of the U.S. Dollar relative to a basket of 6 major currencies , they are Euro, Swiss Franc, Japanese Yen, Canadian Dollar, British Pound and Swedish Krona.
If the Dollar Index shows a consistent upward trend, this can be associated with higher expectations of a rate hike.
During 2022, Dollar Index(DXY) was having a good run , as the rate hike has been pretty aggresive , US’s Fed fund rate rose from 0.25%~0.50% to 4.25%~4.50% last year , and this wss reflected in the strength of Dollar Index (DXY).
However, in 2023 , especially during the early of July , the DXY has been diving , this shows the anticipation of a halt in rate hike.
do you think FED will raise the FED fund rate for the last time during this month’s FOMC meeting?
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